Marketing Communication Review.docx

Marketing communication Chapter 1 Communication is transmitting, receiving and processing information. Communication plays a key role in any advertising or marketing program. The senders include the chains that start with communication. They send a message. Encoding is forming verbal and nonverbal cues. In marketing the person in charge of designing an advertisement takes an idea and transforms it into an attention-getting message. Messages travel to audiences through various transmission devices. Decoding occurs when the message reaches one or more of the receiver’s senses. Quality marketing communication takes place when customers (receivers) decode or understand the message as it was intended by the sender. In case of Chick-fil-A, effective marketing communications depend on receivers encountering the right message and responding in the desired fashion. Successfully integrated communications employ multiple channels providing a consistent message. In the communication process, feedback takes the form of the receiver’s response to the sender. In marketing communication, feedback includes purchases, inquiries, complaints, questions, store visits, and web site hits. Noise consists of anything that distorts or disrupts a message including marketing communications. The most common form of noise is clutter. Integrated marketing communications is the coordination and integration of all marketing communication tools, avenues and sources in a company into a seamless program designed to maximize the impact on customers and other stakeholders. The marketing mix provides the starting point of the IMC program. A complete IMC plan reaches every element of the marketing mix: products, prices, distribution methods and promotions. A current situational analysis is the process of examining the firm’s ongoing market situation. Defining primary marketing objectives establishes targets. Marketing objectives are identified along the way with key target markets. An account executive works for the advertising agency seeking to sell, direct and manage advertising and promotional programs for client companies. The brand or product manager oversees a specific brand or line of products for the client company. Creatives are the individuals who develop the actual advertisements and promotional materials. The account planner represents the voice of the consumer within the agency to the agency’s staff. A marketing channel consists of a producer or manufacturer vending goods to wholesalers to middlemen, who in turn, sell items to retailers who sell the items to consumers. When consumers believe that most brands provide the same set of attributes, brand parity results. This means quality becomes less of a concern, because consumers perceive only minor differences between brands.

To build loyalty, many marketing efforts have been made to engage customers with the brand at every contact point. A contact point us any place where customers interact with or acquire additional information about a firm. Marketing involves identifying the firm or product’s target market and identifying the appropriate media to reach members of each particular market segment. When marketing managers carefully design all of the steps taken up to this point, the firm can integrate the activities in the promotional tools Messages presented in the advertising campaign can be reinforced through a variety of communication promotions. Marketers employ 2 different strategies for global companies. Standardization, in which a company features a uniform product and message across countries, represents one option. And adaptation that results in the creation of products and marketing messages designed for and adapted to individual countries.

Chapter 2 A corporate image reflects the feelings consumers and businesses have about the overall organization and its individual brands. A strong IMC foundation combines an analysis of the firm’s image and brands with assessments of consumer and business buyer behaviours. A corporate image summarizes what the company stands for as well as how it is known in the market place. The quality of a company’s goods and services ranks as the most important component of a corporate image. The willingness of a firm to stand behind its goods and services when something went wrong was second. Third were perceptions of how the firm dealt with customers, such as by being pleasant, helpful or professional. Positive assurance generates greater value when customers purchase goods or services with which they have little experience. Purchasing from a familiar firm reduces search time and saves effort. Purchasing from a highly recognized company often provides psychological reinforcement and social acceptance. Physiological reinforcement comes from the feeling that a wise choice was made and the belief that the good or service will perform well. Social acceptance results from knowing that other individuals, such as family and friends, have purchased from the same firm and are likely to accept the choice. A quality corporate image provides the basis for the development of new goods and services. A strong corporate image allows a company to charge more for goods and services. Firms with well-developed images have more loyal customers and customer loyalty often results in a positive word-of-mouth endorsements. Positive customer attitudes create corporate equity, which provides greater channel power. Attracting new employees can become another

advantage of a dominant corporate image. A strong corporate reputation often results in more favourable ratings by wall street analysts and other financial institutions, which can help a company raise capital. Future communications can be tailored to promote the proper image. These communications should reach every constituency, including customers, suppliers, and employees. A strong image can be combined with an opportunity present in the external environment to create a strategic advantage. In each industry, the right image sends a clear message about the unique nature of an organization and its products. Rejuvenating an image helps a firm sell new products and can attract new customers. Successful image reengineering requires the company to remain consistent with a previous image while at the same time incorporating new elements to expand the firm’s target audience. Connecting the nostalgic and new consumer groups requires attention to some timeless value, such as authenticity simplicity or a compelling brand story or heritage. Energizing the brand advocates and influencers to spread the word about the new and improved version of the brand becomes the goal. A corporate name provides the overall banner of operations. There are several categories for corporate names: - Overt names= reveal what a company does - Implied names= contain recognizable words or word parts that convey what a company does - Conceptual names =capture the essence of what a company offers - Iconoclastic names =represent something unique, different and memorable. A corporate logo is the symbol used to identify a company and its brands. Logo recognition can occur at 2 levels. First a consumer might remember seeing the logo in the past. Second, a familiar logo may remind the consumer of the brand or the corporate name. Successful logos elicit shared meanings across consumers, a process known as stimulus codability. Brands are names assigned to individual goods or services or to a group of complementary products. An effective brand name allows a company to charge more for products. Strong brands provide customers with assurances of quality and reduce search times while shopping. There are different types of brands: 1. Family brands a group of related products sold under one name 2. Brand extension the use of an established brand name on products or services 3. Flanker brand de development of a new brand sold in the same category as another product

4. Co-branding the offering of two or more brands in a single marketing offer 5. Ingredient branding the placement of a new brand sold in the same category as another product 6. Cooperative branding the joint venture of 2 or more brands into a new product or service 7. Complementary branding the marketing of 2 brands together for co-consumption 8. Private brands proprietary brands marketed by an organization and sold within the organization’s outlets. Developing a strong brand begins with discovering why consumers buy a brand and why they rebuy the brand. A primary feature that keeps a brand strong occurs when it contains something that is salient to customers, which can come from several sources. Trust represents the customer’s belief in the efficacy and reliability of the brand. Trust results from a brand performing consistently and fulfilling its promise, its authenticity and its uniqueness. The final ingredient of powerful brands results when the company acts responsible. Brand loyalty constitutes the ultimate objective of building powerful brands. The degree to which the brand has established a clear unique or authentic proposition determines the value of the brand. Many companies encounter the brand parity problem, which occurs when there are few tangible distinctions between competing brands in mature markets. In contrast, brand equity represents a set of characteristics that are unique to a brand. In B2B markets, brand equity influences selections in the buying-decision-making process. Brand equity often dissuades consumers from looking for cheaper products, special deals, or other incentives. To measure brand equity, marketing experts apply brand metrics, which measure of the return on branding investments. Brand equity based on financial value estimates the future cash flows of a brand based on its unique strength and characteristics, which will then be discounted to determine a net present value. The 3rd approach, revenue premium compares a branded product to the same product without a brand name. The final method, consumer value, attempts to measure the value of a brand based on input from consumers. Private brands are proprietary brands marketed by an organization and normally distributed exclusivity within the organization’s outlets. Private labels also generate higher gross margins. Higher margins enable retailers to earn higher profits on private brands or to reduce prices of the private brands to make them more attractive to price-sensitive consumers. Tactics used by manufacturers to combat gains made by private labels: - Focus on core brands - Increase advertising - Introduce new products

- Focus on in-store selling and packaging - Use alternative methods of marketing Primary purposes of packaging: 1. Protect product 2. Provide for ease of shipping and handling 3. Provide for easy placement on shelves 4. Prevent or reduce theft 5. Prevent tampering (drugs and food) 6. Meet consumer needs for speed, convenience and portability 7. Communicate marketing message. Labels on packages serve several functions. First they must meet legal requirements. The label represents another marketing opportunity. Labels often carry terms designed to build consumer interest and confidence in making the purchase. By providing QR codes on packages and labels, companies help customers choose the right size, brand or style to meet their needs. Realizing the power of word-of-mouth and peer-topeer recommendations, the goal is to have consumers help spread the word about the brand. Firms employ either adaptation strategy or a standardization strategy in promotional programs. A common strategy is to think globally but act locally. Packaging and labelling issues are complex for global firms.

Chapter 3 There are 2 types of buying behaviours: Consumer buyer behaviours and business to business buyer behaviours. Consumer decision-making process: Problem recognition- information search- Evaluations of alternatives- purchase decision -post purchase evaluation. Information search and evaluation of alternatives are most directly related to integrated marketing communication: the information search and the evaluation of alternatives. Consumers needs can be triggered by marketing communications. Internal search in information search phase: the consumer thinks about the brands she is willing to consider, marketing communication is an objective for a brand to become part of consumer’s set of potential purchase alternatives.

External search in information search phase: consumer makes mental decision regarding external research. When consumer has sufficient information, he/she will then go to the evaluating process. However if the consumer remains uncertain, the consumer will undertake external search, that can be gathered from a variety of sources. The amount of time depends on: ability, motivation and cost versus benefits. A person with a high level of education tempts to have the highest ability to search and spends together with a person with a low level of education the less time on searching for external information. The middle class the longest as they have the need to search for details. The motivation od determined by the consumers: - Level of involvement - Need for cognition - Level of shopping enthusiasm Involvement: reflects the extent to which a stimulus or task is relevant to a consumer’s existing needs, wants, or values. Factors are costs, and its importance. The need for cognition personality characteristic identifies individuals who engage in and enjoy mental activities. The search also depends on the enthusiasm for shopping as customers who enjoy shopping undertake a more in-depth search for goods and services. The cost of the search consists of several items: -the actual cost of the good or service - The subjective costs associated with the search, including time spent and anxiety experienced while making a decision. - the opportunity cost of foregoing other activities to search for information. Example: when the perceived cost of a search is low, and the perceived benefit is high, a consumer has a higher motivation to search for information. Marketing experts utilize 3 models of the information search process: attitudes, values and cognitive mapping. An attitude: a mental position taken toward a topic, person or event that influences the holder’s feelings, perceptions, learning processes and subsequent behaviours . Attitudes consists of 3 components: 1. affective =consists of the feelings or emotions a person has about the object, topic or idea. 2. Cognitive =refers to a person’s mental images, understanding and interpretations of the person, object or issue. 3. Conative =contains an individual’s intentions, actions or behaviour. Cognitive- affective- conative

Values are strongly held beliefs about various topics or concepts. By appealing to basic values, marketers try to convince prospective customers that the company’s products align with their products. Knowing how people store, retrieve and evaluate information assists the company’s marketing team in developing advertisements and marketing communications. Cognitive maps stimulate the knowledge structures and memories embedded in an individual’s brain. When a customer receives information or sees an advertisement, it is processed in several ways. New information that is consistent with current info tends to strengthen the existing linkage. However, a customer needs to create a new linkage if there is new information that is not in link with the known information. Cognitive mapping process explains the knowledge structured in a person’s long-term memory. Short new information will be processes in a person’s short-term memory which only retains of 5 to 9 pieces of information meaning that new short messages are easily forgotten -> company repeats advertisements several times to process in the long-term memory. Another way a consumer can process information is to link the message to a new concept. -> You know ruby Tuesday has good food, and then it starts advertising with good quality food, which you have never thought about so the consumer associates the restaurant with another view: “good quality food”. Creatives attempt to design ads that reach the linkages consumers have already made between a product and other key ideas: “This product is the Cadillac of all products in the market. Common linkages are: value, low cost, expense, fun, sex, danger, practicality and exoticness. A marketing message is meant to: strengthen the current linkage, modify current linkage and create a new linkage. A person’s evoked set consists of the brands the individual considers in a purchasing situation. It can be reviewed during both information search and evaluation of the buying decision process. The inept set contains the brands that are part of a person’s memory that are not considered because they elicit negative feelings. The inert set holds the brands that the consumer is aware of but the individual has neither negative nor positive feelings about them. problem recognition -> information search -> evaluation of alternatives: - Evoked set - Multiattribute - Affect referal The multiattribute model suggests that a consumer’s attitude toward a brand is determined by: - The brand’s performance on product or brand attributes - The importance of each attribute to the consumer

The higher the brand rates on attributes to the consumer, the more likely it becomes that the brand will be purchased. The concept of affect referral suggests that consumers choose the brands they like the best or the ones with which they have emotional connections. It also explains purchases of higher prices and “socially visible” products. Furthermore, this model explains 3 things: 1. Using this approach to product evaluation saves mental energy. 2. A multiattribute model approach might have been used previously when making a purchase. 3. Consumers often develop emotional bonds with brands. There are several trends in the consumer buying environment affecting purchasing patterns: Age complexity: this trend challenges marketers to create messages these behaviours do not offend or confuse middle-aged persons. Making advertisements according to age of target group. Gender complexity: means that the traditional roles, lifestyles and interests of men and women have become blurred. Active, busy lifestyles: these lifestyles have a major impact on consumer behaviors. The time pressures account for increases in sales in products what will save time. Diverse lifestyles: the new diverse lifestyles (young marriage, LGBT etc) creates a need to differentiate ads and marketing perspectives. Communication revolution: advances in telecommunications primarily social media and smartphones, have impacted consumers all over the world and have created significant changes in the way individuals communicate with each other, with brands and with companies. Experience pursuits: instead of buying “things” the current trend is to purchase “experiences” which can vary from theme parks to virtual reality playrooms. Health emphasis: the population is continuing to age which is leading to 2 trends: a blossoming interest in health and maintaining youthful appearance. Nowadays it is important for consumers to stay healthy and brands should keep this in mind while advertising. In sum these new trends in the consumer buying environment create several challenges for marketing experts: company leaders will continue to monitor changes so their organizations are not surprised by them, 2nd, companies can create goods and services that match changing values. 3rd, marketing messages can be designed to reflect and build on the values people express.

Factors such as costs, quality and profit considerations influence the final choice. The buying centre consists of the group of individuals making a purchase decision on behalf of a business. The buying centre contains of 5 different roles: 1. users =members of the organization who actually use the good or service 2. buyers =individuals given the formal responsibility of making the purchase 3. influencers= people who shape purchasing decisions by providing the information or criteria utilized in evaluating alternatives such as engineers 4. deciders =individuals who authorize the purchase decisions 5. gatekeepers =individuals who control the flow of information to members of the buying centre. The following series of organizational and individual factors influence the behaviours of members in the buying centre: Organizational influences: several organizational factors affect the ways employees make purchasing decisions for a company. The factors include the company’s goals and its operating environment. Company’s goals, rules, budgets and other organizational factors are creating heuristics. Individual factors: at east 7 factors affect each member of the business buying centre: - Personality =confidence, extroversion, shyness and other personality traits affect both the person performing the decision making role and others in the process. - Roles =roles and perceptions are crucial factors that determine how members of the buying centre engage in the decision. An individuals’ age, heredity ethnicity, gender, cultural memberships and patterns of social interaction influence the roles the person plays. - Motivation =A person’s degree of motivation depends on the match of the individuals goals to the organization’s objectives. - Level of power =a person derives her level of power in the buying process from the role in the buying centre, official position in the organization, and the impact of the purchase decision on a specific job. -Risk =Many vendors are chosen because buyers believe the choice represents the lowest risk. Risk avoidance leads buyers to stay with current vendors rather than switching. -Level of involvement =Individuals with higher level of cognitive capacity seek more information prior to making decisions. Clearly-stated message arguments help persuade both consumers and business buyers with higher cognitive levels. -Personal objectives =Motives, personality types, perceptions of risk, and the other individual factors influence personal objectives. In sum, a buying centre consists of a complex set of relationships. Examining the organizational and individual influences makes it possible to design a communications program that reaches the key people at the right time.

Business buyers make different types of purchasing decisions. The 3 categories are: straight rebuy, modified rebuy and new task. Straight rebuy: occurs when the firm has previously chosen a vendor and places a reorder, only involves a few members of buying centre. Modified rebuy: the buying team considers and evaluates alternatives. The four reasons for this are: 1. Company’s buyers are dissatisfied with current vendor and look for new options 2. If a new company offers what is perceived by a member of the buying centre to be a better buy, the purchase decision may be revisited. 3. A modified rebuy occurs at the end of a contractual agreement. 4. People in the company assignment to make the purchase might have only limited or infrequent experience with good or service. Derived demand: creates many businesses needs. Is based on linked to, or generated by the production and sale of some other good or service. Once a need has been recognized, the order will be placed with the current vendor for a straight rebuy. In a new task purchase, the most complete specifications are spelled out. In modified rebuy specifications, managers examine specifications to ensure that they are current and that they still meet the company’s needs. Once specifications have been identified, potential vendors are located and asked to submit bids. Evaluations of vendors normally occur at 2 levels. 1: initial screening of proposals, narrows the field of vendors down to 3 to 5 competitors. 2: occurs as the firm undertakes a vendor audit. An audit is especially important when members of the company seek to develop a long-term relationship with the supplier. The vendor selection criteria include: quality, delivery, performance history, warranties, facilities and capacity, geographic location, technical capacity and per dollar value. Then, in most purchasing situations, negotiation of terms is a formality. In the business-to-business arena, the postpurchase phase represents a marketing opportunity. Vendors that provide high-quality products, make follow-up calls, and offer additional services often move into a straight rebuy situation. Firms sell virtually the same goods and services to both consumers and businesses in dual channel marketing. The benefits of economies of scale entice manufacturers to sell previously supplied to the business sector in the retail markets (digital cameras, calculators an computers were first sold to businesses later to consumers). To make this move, prices must go down and the products must be user friendly. Another type of dual channel marketing is

spin off sales and means that when individuals who buy a particular brand at work have positive experience and then purchase the same brand for personal use. In dual channel marketing, a primary decision will be made about how to represent the product in each channel. Dual channel marketing strategies: - Use different communication messages - Create different brands - Use multiple or different channels. Business customers and consumers seek the same basic benefits from products. In these situations single approach for both markets will be used. In addition to creating economies of scale, integrating consumer markets has another advantage: the potential to create the synergies that arise from increased brand identity and equity. Selling to consumers and businesses requires the marketing team to understand cultural differences related to products, messages and selling techniques. A cultural assimilator will be a valuable member of the marketing team in international projects. In business to business marketing, a visible global brand presence is equally crucial. A strong brand increases the brand of being selected. “It is no longer sufficient to be a great company, you must be a great brand”.

Chapter 4 Developing an integrated marketing communications plan requires the analysis of the 3 Cs: customers, competitors and communications. When conducting an analysis of customers for the purposes of IMC planning, the marketing department examines: current customers, former customers, potential new customers and competitor’s customers. Current customers =an analysis of current customers helps identify the type of message that will effectively reach this group. Includes an assessment of what they buy, when, where, and how they evaluate products, both while making purchases and upon completion of those purchases.

Former customers =Marketers seek out customers who no longer purchase the company’s products. Understanding why they defected may reveal valuable information including whether a competitor’s product enticed them away or if it was marketing tactics. Potential new customers =When seeking out potential new customers, the marketing team determines which customers the firm should seek to win. Competitor’s customers =An analysis of the processes that lead the competitor’s customers to choose the competition’s offering assists the marketing team in modifying the company’s approach and/or its products to better meet needs. 2nd phase is examining competitors. Every competitor should be identified via primary research: visiting competing stores and observing the store’s employees as they interact with customers, and secondary research: to look at statements from competitors about themselves which can be found in advertisements, promotional materials, annual reports and web sites. Thirdly, you should study what other people say about the competition. Thirdly there is an examination of a company’s communication. It includes the firm’s current communication at all levels in all channels. Furthermore it should study the communications used at competitors. A communications analysis provides information that assists marketing personnel and advertising creative in developing marketing messages and selecting the best IMC components. When the analysis of the company’s context has been completed, the marketing group moves on the delineate the target markets to be served as well as the company’s approach to product positioning. Target markets exist in 2 areas: consumer markets and business-to-business markets. A market segment consists of a set of businesses or group of individual consumers with distinct characteristics. To be a viable market segment, it should pass the following tests: - The persons or businesses within the segments are homogenous. - Segments are distinct from other segments and from the general population. - The market segment must be large enough to be financially viable to target with a separate marketing campaign. - The market segment must be reachable through some type of media or marketing communications method. Market segmentation: consists of identifying specific consumer and business groups based on their needs, attitudes and interests. One primary method of segmentation is demographics, or population characteristics. Typical characteristics are: gender, age, education, income and ethnicity. Gender:

Men and women purchase different products, buy similar products with different features, desire products for dissimilar reasons and buy the same products after being influenced by different kinds of appeals through different media. Gender represents the opportunity to match a product with a large category of individuals. Income: income is closely related to educational attainment. Lower-income homes focus primarily on necessities such as food, clothing and housing whereas income increases, members can purchase from a greater selection of expensive households. At the extreme, luxury items such as yachts and private planes target the wealthy. Ethnic groups: Ethnic minorities represent now 2.5 trillion dollars in buying power. This increase both represents an opportunity and threat: opportunity for those who are able to adapt their messages to other cultures and heritages, and a threat for those who do not. Achieving an effective market to ethnic groups, advertising and marketing agencies should understand the subtleties of multiculturalism. To assist in the marketing effort while building on demographic information, psychographic profiles have been developed. Psychographics: emerge from patterns of responses that reveal a person’s activities, interests and opinions. The VALS typology categorizes respondents into 8 different groups based on resources and on the extent to which they are action oriented. It includes the following segments: 1. Innovators successful, sophisticated and receptive to new technologies. Purchases reflect cultivated tastes for upscale products. 2. Thinkers educated, conservative, practical consumers who value knowledge and responsibility. Look for durability, functionality and value. 3. Achievers goal oriented, conservative consumers committed to career and family. Favour established prestige products that demonstrate success to peers. 4. Experiencers Young, enthusiastic and impulsive consumers. Seek variety and excitement and spend on fashion, entertainment and socializing. 5. Believers Conservative, conventional consumers who focus on tradition, family, religion and community. Prefer established brand and favour American made products. 6. Strivers trendy fun-loving consumers who are concerned about other opinions. Demonstrate to peers their ability to buy. 7. Makers self sufficient consumers who have the skill and energy to carry out projects, respect authority and are unimpressed by material posessions. 8. Survivors Concerned with safety and security. Focus on meeting needs rather than fulfilling desires. Brand loyal and purchase discounted products.

Many marketing efforts target generational cohorts because the approach posses some of the richness of psychographics. A cohort group may respond favourably to the same type of marketing appeal. Geo-targeting: marketing that appeals to people in a geographic area or region. With geotargeting advertisements can be aimed to specific regions with messages that fit consumers, the region and specific events. Geodemographic segmentation identifies potential customers using demographic information, geographic information and psychographic information. Geodemographic marketing has expanded to the internet. Benefit segmentation focuses on the advantages consumers receive from a product rather than the characteristics of the consumers. Demographic and psychographic information can be combined with benefit information to identify segments. Then the marketing team will then further analyse each segment’s consumers. The final type of segmentation: group based on usage or purchases, including the company’s best customers or heavy users, average users, casual or light users and non-users. Objective: highest level of service to the best customers while promoting to 2 usage groups in order to move them up. Cluster databases have the following advantages: 1. Meaningful classification to cluster customers based on a firm’s actual customers 2. Ability to reduce large volumes of customer date to a few concise usable clusters 3. Ability to assign cluster code to each customer in the database. 4. Ability to measure growth and migration of customers over time and over clusters to evaluate the marketing programs. 5. Ability to develop marketing programs for each cluster, that matches characteristics. Primary goals of business segmentation efforts are to group similar organizations into meaningful clusters in order to provide better service. When segmenting an industry, many marketers use NAICS -> North American Industry Classification System. It allows the marketing team to examine specific industries. Some market segments may be based on a company’s sales volume or number of employees. Marketing approached will vary based on the size of a target prospect. Identifying market segments by geographic location can be a successful tactic. The approach benefits businesses with customer concentrated in geographic pockets. Business markets can be segmented based on the manner in which the good o service is used.

Many services have a variety of sues for distinct customers. A final method is customer value. Business-to-business firms are likely to use it as there is an availability of in depth data about each business customer. Product positioning summarizes the perception in the consumer’s mind of the nature of the company and its products relative to competitors. However, 2 elements stand out: customer perceptions of the product along with the product’s standing relative to competition. Effective approaching can be achieved in 7 different ways: 1. Product attributes Any product trait or characteristic that sets a brand apart from other brands may be considered an attribute. 2. Competitors Using competitors to establish position can be accomplished by contrasting the company’s product against others. 3. Use or application Positioning that involves creating a memorable set of uses for a product emphasizes the use or application approach. 4. Price-quality relationship Businesses that offer products at the extremes of the price range may position by price-quality relationships. 5. Product user Distinguishes a brand or product by specifying who might use it. 6. Product class Position can be based on product class. 7. Cultural symbol This is really difficult. When the position is successfully achieved, the company holds a strong competitive advantage. In the international area, effective positioning remains vitally important. Plans are made to establish an effective position when a firm expands into new countries. Positioning constitutes a critical part of image and brand-name management. Effective positioning should increase sales and strengthen the long-term position of an individual brand and the total organization. Communications objectives guide account executives and advertising creative in designing the actual advertising messages. Some examples of marketing objectives include: - sales volume - market share - profits - return on investment. Communication objectives are: - Develop brand awareness - Increase category demand - Change customer believes or attitudes - Enhance purchase actions

- Encourage repeat purchases - Build customer traffic - Enhance firm image - Increase market share - Increase sales - Reinforce purchase decisions Benchmark measure: represents the starting point that has been established in relation to the degree of change following a promotional campaign. Constitutes the baseline from which future outcomes can be assessed. The final 2 steps in the IMC planning process are preparing a communication budget and selecting the IMC components to be utilized. The factors present in the relationship between marketing expenditures and advertising are: - Goal of promotion - Threshold effects - Diminishing returns - Carryover effects - Wear-out effects - Decay effects - Random effects Prior to making a purchase a consumer goes trough the stages of awareness, knowledge, liking, preference and conviction. Threshold effects are present at the point where the advertising program begins to affect consumer responses. Sales-response function curve: shows the diminishing returns from additional advertising expenditures. Concave downward function: incremental increases in expenditures in advertising result in smaller and smaller increases in sales. Marginal analysis: reveals that further advertising and promotional expenditures adversely affect profits, because sales increase is less than what is spent on marketing or advertising. Carryover effects: the consumer has been exposed to the company’s message for so long that, when the time comes to buy, the individual remembers the key company.

Wear out effects: when consumers develop negative attitudes toward the brand if they become annoyed at the marketing communication and believe the advertisement should be discontinued. Decay effects: when a company stops advertising, consumers begin to forget the message. Different ways of preparing a communications budget: - Percentage of sales - Meet the competition - “What can we afford?” - Objective and task - Payout planning - Quantitative models. Percentage of sales budget: allocations are derived from either sales from the previous year or anticipated sales for the next year. It also has some downsides -> It tends to change in the opposite direction of what is typically needed, during growth periods the communications budget may bot need to be increased. Meet the competition budget: seeks to prevent loss of market share. Expenditures are raised or lowered to match those of the competition. A potential drawback -> marketing dollars might not be spent efficiently. What we can afford budget: sets the marketing allotment after all of the company’s other budgets have been determined or while determining the other -> budgets management may not fully recognize the benefits of marketing. Objective and task budget: management lists the communication objectives to pursue during the year and then calculates the cots of accomplishing each objective -> best method as it relates dollars to achieving specific objectives. Payout planning budget: management establishes a ratio of advertising to sales or market share. Based on threshold effects and diminishing returns concepts. Selecting IMC components and media takes place in conjunction with preparation of the budget. Globally integrated marketing communications programs are vital for international firms. It is important to make sure the company’s products and messages will be understood in the region -> Think globally but act locally.

Local partners can be marketing research firms or advertising firms that are familiar with the local language and culture. These partnerships are sometimes formed by a cultural assimilator: which is an individual who understands the market and speaks both languages. A well designed market communications analysis begins with the marketing team identifying strengths and weaknesses of local competitors and places which opportunities exist.

Chapter 5 Marketers face several challenges, as there are several mediums to advertise. Each message should create a marketing advantage in a highly cluttered world in which people are increasingly adept at simply tuning ads out. Advertisements must be noticed and be remembered. The message of the advertisement should incite an action and find a place in the buyer’s long-term memory. Three ingredients create effective advertisements: development of a logical advertising management scheme for the company, thoughtful design of advertisements and careful media selection. Advertising management is laying the groundwork for the total advertising program. One element is developing the message theme: outline key ideas the advertising campaign conveys. A leverage point: presents the key element in the advertisement that taps into, or activates a consumer’s personal value system. The appeal: constitutes the approach used to design the advertisement that attracts attention or presents information to consumers through the use of humour, fear, sex, logic or emotions. The executional framework: explains how the message will be delivered. An advertising management program is the process of preparing and integrating a company’s advertising efforts with the overall IMC message and consists of 4 activities: 1. Review the role of advertising in the IMC effort 2. Select an in-house or external advertising agency 3. Develop an advertising campaign management strategy 4. Complete a creative brief. The result should be a coherent message stating the theme of the entire IMC program. The traditional promotions mix of advertising: consumer and trade promotion and personal selling, together with direct marketing, digital content, public relations efforts and alternative marketing strategies form the basis for communicating with customers. In B2B advertising often assists other promotional activities such as trade shows and personal sales calls. In consumer sector, advertising constitutes the primary communication vehicle with other promotional tools reinforcing the campaign.

When beginning an advertising program, deciding whether to use an in-house advertising group or an external advertising agency constitutes the first issue. The in-house approach lowers costs and retains better control of the message, CEO can work closely with the marketing team and this team has a better understanding of the firm’s products and mission and more quickly produce advertisements. An outside agency often reduces costs, provides greater expertise and may have access to top talent in the industry, and offer an outside perspective, which is not influenced or biased. Agency professionals often have a better understanding of consumers and trends, because they work with a number of clients over an array of products. The size of the account affects the choice between an in-house team versus an external advertising agency. Rule of thumb: marketers consider 75-15-10 breakdown. 75%: money spent on advertising to purchase media time and space, 15%: to agency for creative work. 10% for actual production. Smaller accounts use 50-30-20. Crowdsourcing: outsourcing the creative aspect of an advertisement or campaign to the public. Offers alternative to creating commercials in-house or hiring an external advertising agency and can create a viral buzz as users view advertisements online, recommend or send favourites to friends and post links. External advertising agencies Media service companies -> negotiate and purchase media packages for companies. Direct marketing agencies -> handle every aspect of a direct-marketing campaign through telephone orders, internet programs and direct mail. Consumer promotions, trade promotions -> assist in developing promotions such as coupons, premiums, contests and sweepstakes. Online and digital services is a new group of agencies. Interactive web sites and widgets -> can be used on multiple sites. Social media services -> to reach consumers and businesses through a wide array of internet techniques. Public relations provide experts -> to help companies and individuals develop positive public images and for damage control responses when negative publicity arises. Choosing an agency begins with developing effective selection criteria. 1. Goal setting. The goals provide a sense of direction and prevent personal biases from affecting selection decisions. It guides company leaders by providing a clear idea of what is to be accomplishes and help as they make requests for proposals for campaigns. 2. Selection criteria. The size of the agency should be considered: be large enough for the agency to be important, and small enough that if lost, it would not be badly affected. An agency should have relevant experience and should not have any conflicts of interest. It should also have experience with B2B so that retailers, wholesalers and other channel parties are considered in the marketing and advertising of the product. You should seek for a creative

reputation and capabilities by asking for a list of awards the company has received. A firm that needs an agency to produce a television commercial and also buy media time should check on these activities as part of the initial screening process. The final 3 selection criteria: other services available, client retention rates, and personal chemistry are utilized during the final steps of selection. 3. Screen initial list of applicants. 4. Request client references 5. Reduce list to two or three viable agencies 6. Request creative pitch. The advertising agencies chosen to compete provide a formal presentation that addresses a specific problem, situation or set of questions, a process also called a shootout. The presentations reveal how each agency would deal with specific issues that might arise during preparation of a campaign and helps a client company to choose the agency that best understands the issues at stake and offers a comprehensive approach to solve the problem or issue. Chemistry between the employees of the 2 different firms becomes critical because they should work well together. The primary roles within the agency consists of the account executives, creatives, traffic managers and account planners. Account executives: serves as the go-between for advertising agency and client company. It will be actively involved in soliciting the account, finalizing details of the contract and working with personnel within the agency to make sure the advertisements meet the client’s specifications. Creatives: develop and design advertisements. They are either members of advertising agencies or freelancers. Traffic manager: works closely with the advertising agency’s account executive, creative and production staff. Responsibilities include: scheduling the various aspects of the agency’s work to make sure its completed on time. Account planner: provides the voice and will be the advocate for the consumer within the advertising agency. It assists the client in developing long-term communication strategies and provides direction for individual advertising campaigns. Quality communication is vital. Steward shop reports help clients review the process as well as the outcome. Updating clients will be critical, especially when large amounts of money are involved. Advertising campaign management: the process of preparing and integrating a specific advertising program. The marketing manager oversees the development of the advertising campaign. It consists of 5 steps: 1. Conduct and review the advertising research 2. Establish advertising objectives consistent with the overall IMC program 3. Review the advertising budget 4. Select the appropriate media based on the viewing habits of the target market 5. Prepare a creative brief.

The advertising program should be consistent with every part of the IMC program as well as the company’s mission and make sure the firm presents a clear message to key target markets. After being hired, the advertising agency’s team immediately seeks to understand the client’s company and products. Advertising research goes beyond identifying demographic profiles or target markets. It identifies the brand’s competitors and the communications used in the industry. Two primary approaches exist: Product specific research: involves identifying key product characteristics that become selling points. Customer-oriented approach: helps marketers understand the context of a product’s use. An anthropological approach involves direct observation of consumers using the good or service. A sociological analysis of social class issues, trends and family life cycle changes. Psychological: motives for product purchases such as feeling sexy, powerful or intelligent. One common approach used by agencies to understand a client’s cutomers is a focus group: consists of consumers who are retained to talk about a particular topic, product or brand. Building a brand’s image beings with developing brand awareness: the consumers recognize and remember a particular brand or company name when they consider purchasing options. Advertising can increase brand awareness. Brand equity creates a major advantage for any company with a good recognition. There are 2 characteristics of brands: 1. Top-of-mind brands: When consumers are asked to identify brands that quickly come to mind from a product category, one or two brands are always mentioned. Top choice: is the first or second pick when a consumer reviews her evoked set of possible purchasing alternatives. Advertising serves other goals such as providing information to both consumers and business buyers. In B2B information from some advertisements may lead various members of the buying centre to consider a particular company. Manufacturers use advertising to accompany trade and consumer promotions such as theme packaging or combination offers. Retailers also advertise to support marketing programs. When ads are combined with other marketing efforts into a larger, more integrated effort revolving around a theme, the program is called a promotional campaign. Action-oriented advertising can be used in the B2B sector where generating leads becomes the primary goal. There are 5 advertising goals: 1. Building image 2. Providing information 3. Being persuasive 4. Supporting other marketing efforts 5. Encouraging efforts These goals are not separate from each other and work together to emphasize a goal.

Once the major goals of the advertising campaign have been established, a review of the advertising budget follows. 3 basic tactics are used to allocate advertising funds: 1. Pulsating schedule -> involves continuous advertising during the year with bursts of higher intensity at specific times. 2. Flighting schedule -> ads are presented only during peak times, and not all during other times of the year. 3. Continuous schedule -> advertising in level amounts keeps the brand name repetitively in front of consumers. Matching the pacing of advertisements with the message, media and the nature of the product should be the objective. Selecting the appropriate media requires an understanding of the media usage habits of the target market and then matching that information with the profile of each medium’s audience. Although media buys are guided by the advertising agency and the client company, media companies typically make the purchases. Media companies are able to provide valuable information to the creative staff about how to best reach the client’s target market employing the primary media that target consumer use. The creative work with a document prepared by the client and account executive called the creative strategy or creative brief. The creative takes the information provided to produce advertisements and use it to convey the desired message. A quality creative brief, when prepared properly, saves the agency considerable time and effort and results in a stronger advertising campaign for the client. However research has shown that 40% of the brief is not clear which creates miscommunication. A creative brief identifies the objective of the advertising campaign. The creative reviews the main objective before designing specific ads or the advertising campaign. A creative then examines the target audience. Overly general target markets are not helpful and more specific information will be needed (gender, age, hobbies). The message theme presents an outline of key ideas that the advertising program conveys and it represents the benefit or promise the advertiser uses to reach consumer or businesses. The promise, or unique selling point describes the major benefit the good or service offers. Message themes can be oriented toward either rational or emotional processes. Left-brain advertising features a logical, factual, rational appeal. The right side of the brain contains emotions. Most advertising targets either the right or the left-brain. Support takes the form of fact that substantiates the message team.

Supporting evidence allows creatives to design advertisements that attract attention to the materials that substantiate claims made about products. Constraints are any legal and mandatory restrictions placed on advertisments. It includes legal protections for trademarks, logos and copy registrations and also spells out disclaimers about warranties, offers and claims. Effective creative briefs take the overall IMC message and tailor it to a specific advertising campaign. Two major differences emerge when considering management in an international perspective. Firstly in regard to the process self and secondly concerns preparing international advertising campaigns. Some of the most important differences are in the areas of availability of qualified advertising agencies and how those agencies are selected. Agencies in other countries might not follow typical procedures such as a shootout or the preparation of a creative brief. Advertising campaigns designed for an international audience require an understanding of the various languages and cultures that might be involved.